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November 10, 2012

13Ds are filed with the Securities and Exchange Commission within 10 days of an entity's attaining a greater than 5% position in any class of a company's securities. Subsequent changes in holdings or intentions must be reported in amended filings. This material has been extracted from filings released by the SEC from Nov. 1 through Nov. 7, 2012. Source: InsiderScore.com

In the Nov. 1 letter, Mount Kellett said that the Clearwire board has an obligation to take all steps to ensure that Clearwire has adequate cash resources to proceed with the deal, and not to allow the company to reach a point where an acquisition by Sprint at distressed levels is the only option. Mount Kellett also recommended that the company raise cash by selling excess spectrum, and that it immediately hire an investment bank to conduct this sale.

Mount Kellett disclosed that it now owns 53,188,166 shares (7.7%) after it bought 7,746,654 shares from Sept. 21 through Oct. 11 at prices ranging from $1.50 to $2.07 apiece.

Starboard Value disclosed that it now owns 26,128,823 shares (15.9%) after it bought 12,270,000 in the span from Sept. 4 through Oct. 25 at prices ranging from $1.27 to $1.65 each. Starboard also disclosed owning shares underlying certain convertible senior subordinated notes.

In its filing, Starboard called the shares of Quantum "undervalued" and said it intends to engage the board of directors in a discussion of actions that Starboard believes can "dramatically increase profitability and unlock value for shareholders." Starboard also said that it will seek board representation.

Gamco disclosed it owns 4,176,755 shares (19.2%) after buying 355,001 from Sept. 19 through Nov. 1 for $23.40 to $33.95 each. It also disclosed selling 82,201 from Sept. 5 through Oct. 31 for $19.69 to $33.83. On Oct. 30, Schiff said it would be acquired by
Bayer
(BAYRY) for $34 per share, cash, a 47% premium over the prior closing price.

Business: Internet service streaming television shows and movies Investor's Average Cost: $58.40 per share Stock-Market Value: $4.3 billion ($77.68 per share) What's Happening: Carl Icahn believes the company has a dominant market position and strong international growth prospects, but also may hold significant value for several large strategic investors.

Key Numbers: 25 million: number of NFLX subscribers in the U.S. $304.79: the price of NFLX common stock in July 2011. 4: the number of NFLX directors who received at least 9% withhold votes at their last election, one of whom received 39% withhold votes and is up for re-election in 2013.

Behind the Scenes: Icahn believes that NFLX is at the forefront of secular change in the industry, as video moves from the home to TV anywhere and that the company's unique platform would be very difficult to replicate. Icahn is not looking to micromanage, and doesn't think management is doing a bad job. He more likely looks at this as a win/win situation, with the company undervalued as an independent entity with strong growth prospects but also the possible acquisition target of one of many deep-pocketed strategic investors such as Amazon, Apple, Google, and Microsoft—who would pay a significant premium for the company. If a couple of these behemoths get interested in acquiring Netflix, it could go for a big number. If that does happen, Icahn has a history of assuring stockholders get maximum value in a sales process. The only way this will become an antagonistic situation is if one or more companies show interest in acquiring NFLX at a significant premium and management ignores or rebuffs them.

-- Kenneth Squire

The 13D Activist Fund, a mutual fund runby an affiliate of the author and not connected to Barron's, has a long position in Netflix. In addition, the author publishes and sells 13D research reports, whose buyers may include representatives of participants in, and targets of, shareholder activism.